Diane Van Os decided to buy a new car since her credit union was offering such low interest rates. She borrowed $32,000 at 3.5% on December 26, 2012, and paid it off February 21, 2014. How much did she pay in interest?
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To calculate how much Diane Van Os paid in interest, we need to find the interest for each year and then sum them together.
First, let's calculate the interest for the first year, from December 26, 2012, to December 31, 2013. We can use the formula:
Interest = Principal * Rate
Principal = $32,000
Rate = 3.5% = 0.035
Interest = $32,000 * 0.035
Now, we need to calculate the number of days for the first year. Since 2012 is a leap year, it has 366 days.
Number of days = 366
To find the interest for the first year, we can use the formula:
Interest for the first year = (Interest * Number of days) / 365
Next, let's calculate the interest for the second year, from January 1, 2014, to February 21, 2014. This period is not a full year, so we need to calculate the number of days.
Number of days = February 21, 2014 - January 1, 2014 + 1
Now, using the same formula as before, we can calculate the interest for the second year:
Interest for the second year = (Interest * Number of days) / 365
Finally, we can find the total interest paid by adding the interest for the first and second years.